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Facebook Investor Peter Thiel: Palantir Is The Next Facebook Or Google

For a FORBES magazine story I recently wrote on cyber-security software-maker Palantir Technologies, I spoke with billionaire Facebook investor Peter Thiel, who said that Palantir is “tracking like the really great tech companies, like Facebook or Google.” Thiel thinks the company is the “most undervalued company in Silicon Valley” and will be worth around tens of billions of dollars in a few years’ time. Of course, Thiel is Palantir’s largest stakeholder, and his venture capital firm The Founders Fund has bankrolled much of the startup’s initial costs. But beyond the hype is a company that has accidentally stepped into the middle of controversy, is attracting some of the brightest engineers from top schools, and is making more money than anyone suspects.

Let’s start with the controversy. Up until a few weeks ago, only “Lord of the Rings” nerds knew what a “palantir” was (a seeing stone the company is named after). But recently, Palantir has found itself in headlines for putting together a proposal, along with HBGary and Berico Technologies, to launch cyber-attacks and other “dirty tricks” against Wikileaks and its supporters, on behalf of Bank of America, and against website ThinkProgress on behalf of the U.S. Chamber of Commerce. Pro-Wikileaks hacker collective Anonymous found the proposal and emails by hacking into the account of HBGary’s chief executive.

Palantir responded by issuing an apology and severing ties with HBGary. It has also put the 27-year-old engineer Matthew Steckman — who may have been responsible for putting the offensive tactics on the proposal (according to the emails) — on leave and launched an internal investigation. Some have implied that Palantir’s senior staff must have known about the proposal, given the importance of the clients. But Palantir chief Alex Karp says that’s not how the company works: “The idea that a 27-year-old wouldn’t have the ability to make a decision about our proposal is very foreign to how we work. It would go further up the chain if it was a proposal, but it wasn’t.”

Indeed, the 330-person company is largely comprised of 27-year-old “forward deployed engineers” who are given a lot of free rein to make decisions. But in an industry like cyber-security, young engineers may not have the experience to make the best judgment calls. Even Karp concedes, “There was an oversight breakdown on the proposal phase of our work and we regret that.”

Palantir will need to do some PR clean-up, especially among its applicant pool. The company competes with the Googles and the Facebooks for top talent. Palantir’s Co-director of Engineering Bob McGrew, a third-year Stanford Ph.D. candidate in computational game theory, turned down a job at YouTube offered by co-founder Jawed Karim to go to Palantir. McGrew says the company’s save-the-world “mission” sets it apart. Stanford computer science student Jake Becker says Palantir’s exclusivity in hiring the best of the best makes the company an attractive employer. But Becker also says that the Wikileaks flap “is seriously damaging their reputation on campus.”

Meanwhile, competitors sniff and say that Palantir isn’t doing anything particularly new in the industry. “They are taking a different approach which is trying to bring the Silicon Valley-esque to the beltway,” says i2 CEO Bob Griffin. A primary competitor to Palantir, i2 is a 20-year-old company whose cyber-intelligence software is known as the Microsoft Word of the industry. “The reality is at the end of the day there is no different approach. It’s all the same: it is what is the tool that allows customers to do what they do best.”

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Gokulram Arunasalam It is innovation like this which still makes me bullish on the outlook for the US economy. For the likes of India and China to compete on the same level, education too much move focus towards research and development. I understand China is placing a lot of focus on this, but India still has plenty of progress to make on this.

Another one-sided story from Forbes, that you would think would defend liberal democratic societies, capitalism, and the rule of law better than they do.

Lots of scrutiny on the dastardly doings of Palantir and HBGary who…had a plan to do something. That discussed something on…a PowerPoint. In order to try to fight something that truly is a menace — a power that is a) able to hack and steal classified government documents (!) b) a power that has taken down business sites — you know, the things that you care about and cover normally? — sites like PayPal, Mastercard, and Amazon, not because they did anything wrong, but because they *refused to do something wrong*, i.e. refused to house stolen government dox, and refused to help sustain through payments an unlawful hacking-incitement cooperative, WikiLeaks.

Whatever the crimes that Bank of America or the U.S. Chamber of Commerce are believed to have committed, they can be handled through law enforcement and *due process* — you know, that stuff that Anonymous never gives its victims. Would you like living in a country run by them?

Guess what, you *already do, online*.

If this power were an alien hostile sovereign nation, you might have an easier time grasping what’s at stake.

But because its cool kids who are your pals in Anonymous with the veneer of trendy 4chan l33titude, then you give them a pass.

You pay ZERO attention to the real problem, which is the thuggish Anonymous, which has hacked people’s servers unlawfully and ruined their business.

If they have committed crimes, let the courts judged. But…who will then take on anonymous? Um, a UN committee?

In the end, you seem to be smugly saying that Palantir’s datamining is ok (the entire California Business Model depends on it) as long as they do it more discretely, and even with those “consent” pop-ups. And you imply by throwing the engineer under the bus they can clean up.

(When is Ken Lerer at Huffington, now owned by AOL, going to do the same math about having on his advisory board Chris Poole, the infamous “moot” of 4chan.org, responsible for inciting and organizing hacking and DDOS attacks on other sites?)

As for the ethics of campus kids these days, thinking the bad thing is only Palantir’s engineer, and not WikiLeaks and its ethics-free methods, well, what can you do. But Palantir or something like them in big IT will hire them all some day, and then you won’t have to ask where the lack of ethics comes from.